The information available on 31 December was as follows: non-current assets with a net book value of $10000$, current assets of $5000$, provision for doubtful debts $(1500)$ and current liabilities of $(3000)$. It was then decided to lower the provision for doubtful debts to $800$. Which effects will this adjustment have on the profit for the year and on net assets?
- Aprofit for the year decrease; net assets decrease
- Bprofit for the year decrease; net assets increase
- Cprofit for the year increase; net assets decrease
- Dprofit for the year increase; net assets increase